To investigate the role of c-Raf-1 in serum and 12-0-tetradecanoyl- phorbol-13-acetate (TPA) activation of transcription through AP-1 and Ets binding sites, we utilized a dominant negative mutant, c-Raf-301, which has a single amino acid substitution, ARG to TRP, in the c-Raf-1 ATP binding site. Unlike c-Raf-1 and regulatory domain deletion mutants, e.g., c-Raf-BXB, c-Raf-301 did not transactivate transcription from reporter constructs containing AP-1 or Ets binding sites. c-Raf-301 did not transform NIH/3T3 cells, and interestingly, when overexpressed, blocked cell growth stimulated by serum and TPA reverted v-Raf and Ras-transformed cells to the untransformed phenotype. We have now tested whether induction of AP-1/Ets mediated transcription depends on Raf-1 function. Overexpression of the dominant negative mutant, c-Raf-301, blocked basal levels of transcription in HepG2 cells. Furthermore, c-Raf-301 blocked serum and TPA stimulation of these reporter constructs in NIH/3T3 cells. These results indicate that endogenous c-Raf-1 is required for basal levels of transcription in HepG2 cells and induced transcription in NIH/3T3 cells. To identify the minimal region required for the dominant negative effect, we generated a series of deletion mutants in c-Raf-1. Analysis of these mutants revealed that the N-terminal 1-256 amino acids of c-Raf-I are sufficient for the inhibitory effect. This region of c-Raf-I contains conserved region 1, the cysteine finger region. We have previously postulated that the N-terminus of Raf-I may negatively regulate Raf-I kinase activity by intermolecular interactions. The finding that the N-terminal domain is sufficient to inhibit Raf-1 function, as judged by activation of transcription, is consistent with this model. Alternatively, this region may be necessary for interactions with an upstream regulator of c-Raf-1. Current work is aimed at distinguishing between these mechanisms of Raf-l activation.